According to informed sources, the cauldron of concerns regarding a slowing economy could continue well into FY20 and be immediately felt in the Q1 period.
The GDP growth has been falling consistently from July-September quarter of FY19. The year (2018-19) began with a GDP growth of 8 per cent in Q1 period only to slow down to 7 per cent in the second quarter. It has registered the slowest growth of 6.6 per cent in Q3 period as per Central Statistics Office (CSO) data.
The official CSO figures for the Q4 and the full year 2018-19 are yet to be out. The figures are expected later this week.
"India's economy appears to have slowed down slightly in 2018-19. The factors responsible for this slowdown include declining growth of private consumption," the Finance Ministry said earlier this month in a monthly report.
The slowdown and its effect have already been acknowledged by the Finance Ministry in its monthly report for March 2019 though it did not deal with any quarterly figure or estimation.
The slowdown and the subsequent low Gross Domestic Product figures may not come as a surprise to North Block as the Finance Ministry itself in its monthly report for March said India's economy slowed down slightly in the last fiscal due to declining growth in private consumption, slow increase in fixed investment and muted exports. Despite this, India is still the fastest growing major economy in the world.
The report for March also said there is slowdown of growth in agriculture and sustained growth in industry as well as some challenges.
The sluggishness has reached a high point with India's industrial output reaching a 21-month low in March contracting by 0.1 per cent. Factory output, as measured in terms of the Index of Industrial Production (IIP), had grown by 5.3 per cent in March 2018, according to data released by the Central Statistics Office (CSO).
GDP growth forecast for 2018-19 had also been revised downwards to 7 per cent from 7.2 per cent projected earlier.
"On the supply side, the challenge is to reverse the slowdown in growth of agriculture sector and sustain the growth in industry," the Finance Ministry observed in its monthly report.
In line with declining real GDP growth, private consumption in Q4 of 2018-19 has also declined as reflected in the drop in growth of two-wheeler sales towards the end of the year, the report observed on the domestic demand.